Now that I’ve gotten into medical school, the planner in me is starting the process for planning the actual budget and looking at ways to save money. Since my wife and I have been working since we graduated college, we’ve managed to save up a bit of money to get us through the next four years. It’s going to be an adjustment though since we’re going from 2 incomes to 1. Some things will change, some things may not. Feel free to weigh in.
Most of my spending is limited to one credit card (Discover) and using their spending analysis tool, I’m able to quickly see what my costs are by month for each category (travel, gas, etc). I used this to calculate my average expenses over the past two years. These expenses don’t reflect my wife’s who covers the day care, health care, utilities, and groceries. Some of them are one time costs (ex. car repair) that I’ve divided by month.
Current Expenses:
Mortgage and Property Taxes: $1000 a month
Groceries: $100 a month
Auto Repair: $175 a month
Restaurants: $170 a month
Gasoline: $250 a month
Internet and Phone: $150 a month
Misc Purchases: $150 a month
Travel: $600 a month
Future Expenses:
Tuition (in-state): $30,000 a year
Textbooks: $1,000 a year
Mortgage and Property Taxes: $1000 a month
Groceries: $50 a month (Eliminate random trips to the grocery store)
Auto Repair: $50 a month (Take the bus)
Gasoline: $50 a month (Take the bus)
Bus Fare: $60 a month
Restaurants: $100 (We’ll probably still eat out, just not as much)
Internet and Phone: $150 a month (I should cut back but I really enjoy having a iPhone)
Misc Purchases: $50 a month (X-mas and B-day gifts will be a bit sparse for a while)
Travel: $500 (My family’s spread out and we’ve spent this much over the past two years. International travel prices can be a bit insane. I’m going to look into traveling during the non-peak season though and hopefully that can reduce this cost.)
Great post.
This is a topic that I find very fascinating since most phycians coming out of medical school have no true experience with money or budgeting, including myself.
Hello there, syr_eng2md.
I was hesitating to reply because I do not have a child(ren). But then I thought–how different could my situation possibly be?
One thing you MIGHT consider is losing the car if your wife doesn’t need it for work, or if she has another car located elsewhere in the budget. Your school of choice “may possibly” have a Zipcar right nearby for grocery shopping, weekly outings, etc. I have had a lot of success with Zipcar (granted, in a much bigger place). It would be a lifestyle change for sure. The reason I would suggest this is I have a hard time believing that an actual car that really exists would cost as little as you are suggesting. Also, it would free up the insurance payment your wife is presumably making.
Regarding travel, you have to take this with a grain of salt because I’m not particularly close to my family and my in-laws are gone. That said, I do live far away from my parents. Maybe consider sending only ONE member of the family to visit the far-flung people for the time being. This may be different as the older generation gets older…but possibly.
I agree with keeping eating out and iphone in there for now. If it were me, though I say it as a nonparent, I would even divert the iphone to an extra chunk of babysitting so as to make a tiny bit of free time. This is a pretty major concern for my partner and I–and we’re not the “couple activity” kind, being more of the “woman, make me a hamburger” persuasion–so I say leave the restaurants in if it takes some pressure off and lets you have fun.
We do not eat out at all, and have no childcare, but groceries DEFINITELY exceed 100.00/month!! I can, freeze, cook from scratch, and even bake bread to stretch the grocery budget. We eat no pork ( he is Muslim ), Lots of chicken, and some ( very little) beef. As middle aged folks we try to do a lot of fresh vegetables and fiber rich foods, but eating properly and getting 5 servings of veggies and fruits a day is EXPENSIVE. Produce is much more expensive than meat, actually. I split the shopping between three stores, clip coupons, watch ads, and buy the cheapest items at each store, However, I KNOW we spend close to 300 - 350 per month on groceries. And I am “old school” and DO NOT buy hardly anything in the way of packaged or processed foods. My mother raised me as a victory garden/depression era cook. I can make ANYTHING from scratch. My gas runs around $75.00 a month - 6 block commute and no outside travel. This really made me start thinking about what my budget will look like during med school…Hmmmmmm.
- syr_eng2md Said:
These expenses don't reflect my wife's who covers the day care, health care, utilities, and groceries. Some of them are one time costs (ex. car repair) that I've divided by month.
Current Expenses:
Mortgage and Property Taxes: $1000 a month
Groceries: $100 a month
Auto Repair: $175 a month
Restaurants: $170 a month
Gasoline: $250 a month
Internet and Phone: $150 a month
Misc Purchases: $150 a month
Travel: $600 a month
- In reply to:
I thought you were crazy until I noted that this was just your portion of the expenses . . . 100 a month covers our milk, bread and sandwich meat bill . . . maybe. LOL.
Also, why 7 grand a year in travel once you're in? I presume you are figuring on adjusting that number. Nevermind, I just reread your post!
I think you are on track. One of the things that let me quit a FT job two years ago was being debt free except for a small mortgage. We used the Dave Ramsey plan, not because we are avid followers, but so there would be a tie breaker when we disagreed on a financial decision. It's been a blessing. I've stayed debt free for undergrad, but am getting near the bottom of the barrel. I've resigned myself to borrowing some for med school, but still dislike the idea of going backwards for things like living expenses, so I am figuring on working PRN still, a shift or two a month at some point in school.
Crepitus
Has any of you considered maxing out your 401k contributions why still working ($16500 per year) and then using these money for living expenses during medical school?
Tax rate should be very minimal since you will have no income so on the tax break alone, one can save 15% (25% while working vs. 10% when in med school) plus earnings on the pre-tax amount for couple of years.
This is my plan - the only part I still need to figure out is how financial aid office in medical school treats retirement savings when calculating financial aid.
Thanks for the responses guys! I really appreciate it.
lurkation - You raise a good point. Cars are already paid for but downsizing to one car would free up the car repair cost and insurance payment. And yes, the car insurance is paid by my wife and the costs I listed are only for my car. I like your idea on travel. I’ll have to discuss that with my wife to see if it’s feasible. Thanks for your thoughts!
VickiV - Ah yes, you’re right. I should have been more clear. My wife does the majority of the grocery shopping. The $100/month is random grocery runs I make for ice cream, beer, bacon, etc. She’s the health nut in our family. I envy your spending on gas though! It’s one of the reasons I’m looking into taking the bus when school starts.
Crepitus - I completely agree with you. We’re actually pretty close to debt free. Dave Ramsey has some good solid advice. You’re right though, I really dislike the idea of taking on any new debt. I have savings for my living expenses and may take out loans for tuition.
Olivia - I’m in this position. I’ve managed to save up quite a bit by contributing (just under max) to my 401k contributions while working. There’s pros and cons with this approach though. Like a few years back, I had a cash crunch because I put so much into my retirement savings. I had to borrow a little bit of money from my sister for a couple weeks. But you’re right, when I go to school, I can take out a disbursement, pay a lower tax rate, and use that money for living expenses. I’m still trying to figure that out though. How much should I use for living expenses? How much should I use for tuition? How much loan should I take?
Olivia, although this is a long way off for me, I think that I will do my best to get by on the school’s level of living expenses with loans and have my retirement as a back-up. At that point, I will have rolled my 401-k into an IRA, since I wouldn’t be working at my current job anymore.
To answer your question, my wife and I are maxing out our savings right now for a number of reasons. I want to have something to fall back on with my retirement savings if I do get into med school and my current company would actually be contributing 6% of my salary to that until I go! Also, we’re having a baby in February, so I’m trying to get rid of all debt ASAP, even when not considering med school.
Fortunately, my wife has a job that would put us just above the family of 4 poverty level, plus any student loan living expenses should allow us to live reasonably for those four years. I’m hoping that we can whittle our budget down to bare bones slowly over the next two and a half years so that it won’t be a huge shock if I do get in.
If you can do Medical School on this budget, then God bless you:
Current Expenses:
Mortgage and Property Taxes: $1000 a month
Groceries: $100 a month
Auto Repair: $175 a month
Restaurants: $170 a month
Gasoline: $250 a month
Internet and Phone: $150 a month
Misc Purchases: $150 a month
Travel: $600 a month
Future Expenses:
Tuition (in-state): $30,000 a year
Textbooks: $1,000 a year
Mortgage and Property Taxes: $1000 a month
Groceries: $50 a month (Eliminate random trips to the grocery store)
Auto Repair: $50 a month (Take the bus)
Gasoline: $50 a month (Take the bus)
Bus Fare: $60 a month
Restaurants: $100 (We’ll probably still eat out, just not as much)
Internet and Phone: $150 a month (I should cut back but I really enjoy having a iPhone)
Misc Purchases: $50 a month (X-mas and B-day gifts will be a bit sparse for a while)
Travel: $500 (My family’s spread out and we’ve spent this much over the past two years. International travel prices can be a bit insane. I’m going to look into traveling during the non-peak season though and hopefully that can reduce this cost.)
My two boys, age 5 and 2, but the 90%ile for height, can clean out a fridge like a hoard of locusts. I’d better be out of medical school by the time they are teens, but even now, $100 in groceries is enough for about 1.5 days. add my daughter in there, and the budget is blown. Also our phone bill is higher, because both my wife and I need a phone to coordinate the activities of the kiddos (Who’s picking up who from where?)
Clothing/shoes other expenses for kids add up. So, it is different with family. That being said as teachers, we exist on a shoestring budget as it is - so I don’t know how different it will be but budgeting is how you have to do it, though it can hurt!
Good luck!
Thanks for your input terevet. We only have one child now so it’s good to get some perspective from someone with multiple kids. Would you feel comfortable listing your current expenses? I’m curious to find how much the average family with multiple kids spends on activities, clothing/shoes, and groceries.
The grocery expense is a bit misleading. Sorry about that. They reflect my expenses only. My wife does most of the grocery shopping but those expenses aren’t listed here. I would guess that she probably spends around $300 for groceries per month. I don’t keep track of her expenses though so I don’t know the details.
As I had said, I can ( as in mason jars with lids for pickles, jams jellies, tomatoes, fruits, and some veggies), I freeze - (veggeies mostly), I coupon clip, and I comparison shop between stores. No processed and prepared foods ( expensive and you pay for packaging) and most meals are from scratch. I raised two sons by myself. Both played sports throughout high school. Keep in mind, I baked and kept the cookie jar full. We went through a gallon of milk a day, two boxes of cereal a day, and about 25-50.00 in microwaveable munchies - between meals, a day ( mostly mini-pizzas, burritos, and pizza rolls) Also paid for school lunch ( 130.00 per child, per month) That was strictly for convenience - as I worked full time over and above single parenting. My boys were NEVER obese or overweight. Were very fit, and spent those calories chasing footballs or baseballs, hunting, fishing, and GROWING ( both are well over 6 foot tall now). During the teenage years, my grocery bills ran between 450-600 a month - and that was a few years back - no idea what it would be now, as food has really gone up. They are 22 and 24 now and feeding themselves. Don’t mean to scare ya’ but it really was a hefty expense keeping them fed during the teenage years.
Thanks for all the great advice and posts above. Has anyone thought of a reasonable amount of debt to be in once graduated. I’m in my mid thirties and will probably be about 45 when done with med school and residency. I’m thinking that I could easily wrack up about $400-$500k in debt between living expenses, tuition etc. by the time I’m out of residency. I’m aiming toward radiology. Any advice?
- oldprofessor Said:
Though we should only have this problem, one observation would be to think twice re: respectable state school vs. respectable private school. Going to a comparatively obscure place takes on a whole new look when one does the math. This is not as useful, of course, for people with only one state school.
Thanks for the insight. My numbers are with considering state schools only. I have a family of 5 (including myself) to support through school so it’s gonna be interesting.
If you have an academic career in the sciences, though, you should have a reasonable shot at some of the “extremely special” options. Cleveland Clinic Lerner College of Medicine is free and Columbia’s Bassett program has a very nice scholarship (I believe $30,000/year) if you are willing to do (most of) clinicals in Cooperstown. If you are recruitable then other schools will be willing to work with you. Lord knows I don’t say this from personal experience…but actual real friends have done this. So don’t limit yourself TOO much when applying. You can always say no, we should be so lucky.
Advice? Keep your debt as low as possible. Easier said than done with your tribe. 
At least you’re looking into a high paying specialty…
- Olivia Said:
Tax rate should be very minimal since you will have no income so on the tax break alone, one can save 15% (25% while working vs. 10% when in med school) plus earnings on the pre-tax amount for couple of years.
I am late to this thread but please note, in addition to being taxed on 401(k) as income, you also get a 10% penalty for early withdrawal (ie prior to age 59 1/2), even for a "hardship" withdrawal for educational purposes.
- VickiV Said:
Oh my.